Beware of Persons Engaging in the Unauthorized Practice of Law

diploma.jpgOur readers should be wary of persons who may be engaging in the unauthorized practice of law. This issue is defined as a non-lawyer rendering legal advice or drafting legal documents. Section 478 of New York’s Judiciary Law declares that it is unlawful to practice or appear as an attorney for another person, to render legal services or hold oneself out to the public as entitled to practice law, without being duly licensed and admitted to practice law. This blog post will define the unauthorized practice of law, discuss New York laws pertaining to same and describe situations that our readers should avoid.

Common situations comprising the unauthorized practice of law include the following. A real estate broker drafts a contract, lease or mortgage. A “loan modification expert,” claiming to be an attorney, negotiates with a lender and then advises the borrower to enter into a loan modification. A client or customer dealing with such persons should be especially concerned if they are told that the transaction is on the “fast track,” that there is “no time” to consult an attorney and that they are advising them as an attorney. Another red flag is the person’s self- interest. A real estate broker wants to get the deal done to earn his commission and will encourage a simple contract to be signed without attorney objections, which objections may be validly protective of the client.

Real estate brokers and agents are subject to the loss of their license for the unauthorized practice of law. Article 12-A of New York’s Real Property Law governs the licensing requirements of real estate brokers and salespersons. This Article contains the provision requiring real estate brokers and agents to be licensed and the procedure for the potential revocation of their license. The New York Attorney General’s Office prosecutes criminal actions for violations of said Article. In addition, the New York Department of State accepts complaints against licensed brokers and conducts investigations accordingly. Brokers are vulnerable to claims involving the unauthorized practice of law if they draft any document pertaining to real estate such as a contract, lease, mortgage or deed, especially if they are paid to do so. However, if they use one of the forms approved by the bar association or local brokerage association in the county in which they are located, including only ministerial terms such as name, date, property address, they will not be subject to claims of unauthorized practice of law; particularly if they note in boldface type that the document is subject to review by each party’s attorney.

Attorneys are trained to employ the proper judgment in which document to use, when a provision pertaining to the unique transaction should be drafted “from scratch” and the delivery of verbal advice. While lawyers genuinely appreciate brokers as those who introduce the parties to the transaction, our mutual clients deserve the opportunity to obtain the advice of skilled attorneys. It is very easy for the general public to determine if a person is licensed to practice law in New York. Should a person represent himself as a lawyer, you should look up the person on this database to verify whether they are admitted to the New York State Bar and whether they are in good standing. If the person is not in the database, they may be involved in a scam and/or be a disbarred attorney (or be validly admitted in another state besides New York). Our firm has encountered such situations in our representation of clients, who we have protected from unscrupulous individuals.